Momentum, Meet Wall

By Brendan Conway

The year’s highest-flying investment themes are falling on their face at the moment, and you can’t blame any particular news headline.

Wednesday’s trading instead looks a lot like good-old fashioned risk aversion. Smallcaps, technology stocks, and the year’s favorite MoMo stocks are falling. Meanwhile the stodgy Dow Jones Industrial Average is tacking on 106 points. The boring old Utility Select Sector SPDR Fund (XLU) is near the top of the heap. Bonds are back in demand.

Elsewhere, matters are harder to explain. Like today’s trading in Guggenheim Solar ETF (TAN). The ETF is down 2.1% for no obvious reason — except that investors are sitting on a remarkable 165% YTD gain.

Or Global X Social Media ETF (SOCL), down 1.1% ahead of Twitter’s closely watched IPO. This one has soared more than 50% this year.

“Mainly the ebb and flow of speculation” was how one portfolio manager described Wednesday’s trading to Dow Jones Newswires, which sounds about right.

The theme of 2013 has been the fear of missing out. That is, missing out on stock-market gains. Is the fear of losing money getting stronger?

About Focus on Funds

As exchange-traded funds and other investing vehicles have ballooned in number, the task of figuring out what works well and what doesn’t has only gotten harder. Barrons.com’s Focus on Funds looks under the hood of ETFs, mutual funds and hedge funds for overlooked values, actionable ideas and the latest pitfalls for fund investors.

Chris Dieterich has covered the U.S. stock market for The Wall Street Journal and Dow Jones Newswires. He is a graduate of Regis University and the Missouri School of Journalism.